Ellis Hamburger, Business Insider
All-you-can eat music service Spotify is raising another big round of funding, and it is asking investors to value the company somewhere around $3.5 billion, multiple Silicon Valley investors tell us.

These sources asked not to be named because they don't want Spotify to know they are giggling at it behind its back.

Spotify raised more than $100 million at a $1 billion valuation in 2011.

Sources say firms are reluctant to do the deal at such a high valuation, given that Spotify does not own the content its users pay to access, and that it does not have exclusive rights to that content either.

To these skeptical investors, Spotify is a less attractive version of Hulu which nearly sold for $4 billion last fall. Hulu doesn't own the content it hosts, either. It does have exclusive rights to much of it. Spotify's ownership structure is seen as more favorable than Hulu's, however. Hulu is a messy joint venture between rivals Disney, Comcast, and News Corp.

Firms said to have passed on the deal include late stage firm TCV and every-stage-investor Andreessen Horowitz.

A source close to a Spotify investor tells us these rejections have not ended the company's fundraising efforts, and that some late stage startup investors have expressed interest in the deal, even at so large a valuation.